Question 1

Briefly explain why empirical consumer demand studies such as Patrick McCarthy's study of automobile demand are relevant to managers.

Accepted Answer

Such studies illustrate the types of data available for analyzing the demand for different products.In many instances, data sources such as industry and consumer surveys that researchers discover may not have been widely known.Also, empirical demand studies usually provide a discussion of previous studies and demonstrate how researchers conceptualize the problem of estimating the demand for a particular product.

Question 2

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population.

Accepted Answer

A) True 
 B)False  True

Question 3

Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:

Accepted Answer

A) simple regression analysis. 
B) correlation analysis. 
C) multiple regression analysis. 
D) cluster analysis. 
A) simple regression analysis. 
B) correlation analysis. 
C) multiple regression analysis. 
D) cluster analysis. C

Question 4

The coefficient of determination is .90, the number of observations is 30, and a multiple regression model using 2 independent variables is estimated.What is the value of the adjusted coefficient of determination?

Accepted Answer

A) .8926 
B) .9000 
C) .7500 
D) .8000 
A) .8926 
B) .9000 
C) .7500 
D) .8000

Question 5

Reliance on expert opinion to predict consumer behavior has the advantage of being a relatively low cost approach to gathering information.In many situations, however, it is subject to several sources of bias that can undermine its reliability.

Accepted Answer

A) True 
 B)False

Question 6

The number of observations minus the number of estimated coefficients in a regression equation is called:

Accepted Answer

A) degrees of freedom. 
B) variance. 
C) standard error fo the regression. 
D) none of the above. 
A) degrees of freedom. 
B) variance. 
C) standard error fo the regression. 
D) none of the above.

Question 7

Adjusted R² gives the actual percentage of the variation in the dependent variable explained by the regression model.

Accepted Answer

A) True 
 B)False

Question 8

The overall predictive power of the estimated regression equation is measured by the F-statistic.

Accepted Answer

A) True 
 B)False

Question 9

The least squares regression is based on:

Accepted Answer

A) maximizing the absolute sum of squares errors. 
B) minimizing the absolute sum of squares errors. 
C) maximizing the sum of squared errors. 
D) minimizing the sum of squared errors. 
A) maximizing the absolute sum of squares errors. 
B) minimizing the absolute sum of squares errors. 
C) maximizing the sum of squared errors. 
D) minimizing the sum of squared errors.

Question 10

Refer to Scenario 2.If the age of a house is 25 years with 1,500 square feet, what is the estimated market value of the house?

Accepted Answer

Market Value = 47331

Question 11

You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack.What is the price elasticity?

Accepted Answer

A) 0)30 
B) -0.30 
C) 1)0 
D) -1.0 
A) 0)30 
B) -0.30 
C) 1)0 
D) -1.0

Question 12

Data collected on the same observation unit at a number of points in time are called:

Accepted Answer

A) cross-section data. 
B) time series data. 
C) panel data. 
D) none of the above. 
A) cross-section data. 
B) time series data. 
C) panel data. 
D) none of the above.

Question 13

The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):

Accepted Answer

A) F-test. 
B) autocorrelation test. 
C) multicollinearity test. 
D) t-test. 
A) F-test. 
B) autocorrelation test. 
C) multicollinearity test. 
D) t-test.

Question 14

Refer to Scenario 1.What is the coefficient of determination?

Accepted Answer

A) 1)000 
B) 0)000 
C) 0)037 
D) 0)324 
A) 1)000 
B) 0)000 
C) 0)037 
D) 0)324

Question 15

The ratio of the regression coefficient to its standard error is called:

Accepted Answer

A) t-statistic. 
B) F-statistic. 
C) partial F-statistic. 
D) coefficient of determination. 
A) t-statistic. 
B) F-statistic. 
C) partial F-statistic. 
D) coefficient of determination.

Question 16

Given the demand function in log-linear form: Q = 120 - 1.5P + 12ADV where Q = quantity, P = price, and ADV = advertising expenditures, what is the price elasticity?

Accepted Answer

A) 1)5, inelastic 
B) -1.5, elastic 
C) 120, elastic 
D) 12, elastic 
A) 1)5, inelastic 
B) -1.5, elastic 
C) 120, elastic 
D) 12, elastic

Question 17

Least squares regression minimizes the sum of the absolute errors.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?

Accepted Answer

A) Direct consumer surveys. 
B) Expert opinion. 
C) Analysis of historical data. 
D) Test marketing and price experiments. 
A) Direct consumer surveys. 
B) Expert opinion. 
C) Analysis of historical data. 
D) Test marketing and price experiments.

Question 19

Refer to Scenario 2.If the age of a house increases by 1 year given that the square feet is held constant, what is the impact on the house's market value?

Accepted Answer

The Market

Question 20

Adding an independent variable to a regression model will always reduce the coefficient of determination.

Accepted Answer

A) True 
 B)False

Briefly explain why empirical consumer demand studies such as Patrick McCarthy's study of automobile demand are relevant to managers.

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population.

Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:

The coefficient of determination is .90, the number of observations is 30, and a multiple regression model using 2 independent variables is estimated.What is the value of the adjusted coefficient of determination?

Reliance on expert opinion to predict consumer behavior has the advantage of being a relatively low cost approach to gathering information.In many situations, however, it is subject to several sources of bias that can undermine its reliability.

The number of observations minus the number of estimated coefficients in a regression equation is called:

Adjusted R² gives the actual percentage of the variation in the dependent variable explained by the regression model.

The overall predictive power of the estimated regression equation is measured by the F-statistic.

The least squares regression is based on:

Refer to Scenario 2.If the age of a house is 25 years with 1,500 square feet, what is the estimated market value of the house?

You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack.What is the price elasticity?

Data collected on the same observation unit at a number of points in time are called:

The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):

Refer to Scenario 1.What is the coefficient of determination?

The ratio of the regression coefficient to its standard error is called:

Given the demand function in log-linear form: Q = 120 - 1.5P + 12ADV where Q = quantity, P = price, and ADV = advertising expenditures, what is the price elasticity?

Least squares regression minimizes the sum of the absolute errors.

Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?

Refer to Scenario 2.If the age of a house increases by 1 year given that the square feet is held constant, what is the impact on the house's market value?

Adding an independent variable to a regression model will always reduce the coefficient of determination.

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters

Exam 4: Techniques for Understanding Consumer Demand and Behavior

Briefly explain why empirical consumer demand studies such as Patrick McCarthy's study of automobile demand are relevant to managers.

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population.

Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:

The coefficient of determination is .90, the number of observations is 30, and a multiple regression model using 2 independent variables is estimated.What is the value of the adjusted coefficient of determination?

Reliance on expert opinion to predict consumer behavior has the advantage of being a relatively low cost approach to gathering information.In many situations, however, it is subject to several sources of bias that can undermine its reliability.

The number of observations minus the number of estimated coefficients in a regression equation is called:

Adjusted R² gives the actual percentage of the variation in the dependent variable explained by the regression model.

The overall predictive power of the estimated regression equation is measured by the F-statistic.

The least squares regression is based on:

Refer to Scenario 2.If the age of a house is 25 years with 1,500 square feet, what is the estimated market value of the house?

You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack.What is the price elasticity?

Data collected on the same observation unit at a number of points in time are called:

The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):

Refer to Scenario 1.What is the coefficient of determination?

The ratio of the regression coefficient to its standard error is called:

Given the demand function in log-linear form: Q = 120 - 1.5P + 12ADV where Q = quantity, P = price, and ADV = advertising expenditures, what is the price elasticity?

Least squares regression minimizes the sum of the absolute errors.

Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?

Refer to Scenario 2.If the age of a house increases by 1 year given that the square feet is held constant, what is the impact on the house's market value?

Adding an independent variable to a regression model will always reduce the coefficient of determination.

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters